Woolworths Group Ltd (ASX: WOW) shares are a popular option for many ASX investors for some pretty obvious reasons. Everyone knows Woolworths and is aware of this company's dominance when it comes to its supermarket network. It would also help that Woolworths has managed to grow its earnings and dividends, pretty consistently for decades.
However, although investor fondness for Woolworths shares is obvious, I'm sure there would be plenty of investors who would look at the Woolworths dividend today and perhaps hope for something a little more substantial. At 2.85%, Woolworths' dividend yield is decidedly on the low side when it comes to an ASX blue chip. And that's despite its fully franked nature.
The big miners, big banks, Telstra Group Ltd (ASX: TLS) and Woodside Energy Group Ltd (ASX: WDS) all offer far higher yields today. Even Coles Group Ltd (ASX: COL) is currently putting Woolworths to shame with its present yield of 4.15%.
So with this in mind, I'm sure that most Woolworths shareholders today are hoping this 2.85% dividend yield will grow in 2024.
But how likely is that?
A shaky income track record
Well, looking back, Woolies has a fairly shaky track record when it comes to increasing its annual dividend. Unlike Coles, which has given investors a steady annual pay rise every year since 2019, Woolworths' dividends have been a bit all over the shop.
2019 saw the company fork out a total of $1.02 per share. By 2020, that had fallen to 94 cents a share.
2021 saw a big increase, with the company's payouts surging to $1.08 per share. But 2022 had another decline, with Woolworths shares only yielding 92 cents per share.
And that brings us to this year. Over 2023, Woolworths has paid out an April interim dividend of 46 cents per share, as well as a final September dividend of 58 cents per share. That comes to an annual total of $1.04 per share.
But what will next year bring?
Will the Woolworths dividend yield grow in 2024?
Well, one ASX broker who reckons Woolworths is poised to give investors a big pay hike is Goldman Sachs. As my Fool colleague James covered last week, Goldman has a conviction buy rating on Woolies right now, complete with a 12-month share price target of $42.40.
When it comes to dividends, Goldman reckons Woolworths shares will reward investors with a total of $1.49 per share in dividends over the 2024 financial year. Seeing as we've already had FY24's first dividend of 58 cents, that implies an April 2024 interim dividend of 91 cents per share.
If this turns out to be the case, it would be, by far, the largest dividend Woolworths has ever paid.
But Goldman didn't stop there. It also predicted a total of $1.63 in dividends per share over FY25.
No doubt Woolworths shareholders will be salivating at that prospect. But we'll just have to wait and see if Goldman is on the money there.
